January 02, 2007

Betting on CAT Results

It is that time of the year again, when the institute which churns out super efficient managers, call some more people to join their race. And not surprisingly, they seemed to have extended the deadlines without prior notice. After all, the IIM's have been troubled to no end this year by changing reform policies and what not. And this is their chance to get back at the people.

But I have other plans. For in every problem there is an opportunity.

Starting next year, I plan to start up a website, call something like www.betthecat.com. The idea would be to charge everybody Rs 10, and let them guess the exact time at which the CAT results would be out. I am working on the business plan, so that I can convince the venture capitalist.

Now, the costumer base is close to 2 lakhs. And if you add in say a large number of parents, and teachers, and institutes, the final base should be close to double that. Since it would cost just rupees ten to get involved, I am sure, at least half of them would bet on it. More so, because in that one week, there is nothing more interesting that people like to do. In schools and offices across India, people are talking about the same thing.

So our expenses would be something like this.
Buy domain name - Rs 500
Buy hosting service - Rs 5000
Building the website - Rs 0 ( I'm usually out of work, so I guess I can make it )
Fixing up with Paypal - Rs 5000

After that all that would remain, is to find out the exact time at which the results came out on the website. That might be possible by c0nverting the website to a RSS feed and noting the time when the results section is added to the website.

Now, assuming a lakh people are intereted in paying ten bucks, we could raise Rs 10 lakh in a single week or so. Add to that the income from advertising. Google adwords would allow us to get in $500 ( or Rs 25,000) and institutes which advertise, would allow us to raise another 5 lakhs.

The final balance sheet would look something like this
Expenses - Rs 10,500
Income - Rs 15,25,000

Profit - Rs 15, 14,500

With profit margins like that, I could give out prizes worth Rs 5 lakhs.

Now, about 1,00,000 people are participating. In the one week, people can choose from 10,080 minutes to find the correct value. So on an average 10 people would bet on any given minute value. Assuming the number of people who bet on the right minute is 10 times the average, we could give out prizes close to Rs 5000 for each of the 100 winners.

So, all in all, Rs 5000 if you guessed the correct time at which the results come out, on paying just Rs 10. Would you be interseted...